eastern ukraine to provide food and medicine. are they a trojan horse? america, wage inequality is ever greater. we speak to the mayor of boston. good morning, everyone. this is "bloomberg surveillance." live from new york. i'm tom keene. joining me, back from 35,000 feet, adam johnson. olivia sterns is with us. scarlet fu is off today. what did you do? f-16.ent up in an it was out of control. unbelievable. >> did you have oxygen? you do look like tom cruise. >> yeah. >> i will admit, there was one point in the middle of doing multiple loops, we did for loops , i said, can we go steady here for a second? he said, yeah, me too.

we wanted to talk about sequestration in a different kind of way. >>. . oh stop. [laughter] sequestration? >> this is quite serious. they were shut down for six months. control room, they are saying, are you kidding me? overnight,go come german confidence falls to an eight-month low on concern over ukraine. u.k. food prices follow supermarkets compete for consumers. we got a mixed read. , manufacturing fell less than expected. >> the german news was the big deal. >> a series of we did coming out of germany. >> eight months of falling consumer confidence. i know we will joined by ian bremmer to talk about what is happening. economic data in the u.s.. a few things.

on is theam focused jolt jobs. that suggests we are hiring at a rate which is the highest we have seen. >> but what are we paying them? the question we will ask the mayor of boston. >> jpmorgan says the claims are back to where they were. >> unbelievable. >> yeah. a shame we're only counting the in 1973 ineople participation. earnings season is winding down. kate spade. that is for you, olivia. tribune media. you like that? you like those kate spade covers for the iphone. >> heavy asian push.

renaming itself kate spade is focused on resale mean -- reshaping the brand. they have an ad that just says "hello, tokyo." >> let's do a data check. we have a lot of other stuff to move onto. futures up six. the euro is weaker off of the zew. the fix, that resilient market. , that resilient market. a terrific lack of volatility. ever lower yields off that zr ew. here is the dow. here is the precursor for the moving average. go down. bounce we go off. that is a correction. i don't buy it.

let's get to the importance of geopolitics on our front page. here's olivia sterns. >> more news overnight coming out of iraq. the political showdown escalating. the showdown between maliki and president obama continuing. he has increased the number of troops on the streets in an effort to show who is in charge. he is demanding that he be allowed to name a new cabinet a nd survey third term as prime minister. president has asked partyr member of maliki's to form a government. >> iran backs choice of the new pm. >> the u.s. president and the iranian leaders are on the same page. >> the u.s. has said that the

next government needs to be inclusive of all iraqis, including sunni muslims. that is the criticism of al-maliki. >> isis is sunni, to be clear. as opposed to the two candidates in theory to run iraq currently who are shiite. >> candidate is a big word. toni four hours, from the news, not much as changed. we will wait. , fromthe last 24 hours the news, not much has changed. we will wait. we will talk to phil mattingly. andanks back in the black how. they have not been as profitable in years. they are lending to companies and individuals at the fastest pace since the financial crisis. perhaps lending is not so bad.

the second quarter was the second most profitable and it n 23 years. that is quoted on the front page "washington journal -- "wall street journal" story. all of these double-digit, billion dollar fines are clearly not biting. >> the percentage of operating income -- you take the gross fine, the consumer fine or cash fine, and compare it down the income statement. are these slaps on the wrist? >> they would appear to be. cases, we'ree talking about finds that amount to one quarter's worth of the prophet. as profits are accelerating, now you can make the case that it is not -- >> a lot of changing in the business mix, trading is down, equity trading is way down. commercial lending is up 13%. we will get the take from citigroup, the guest host in the

7:00 hour. whether or not these numbers are really an endorsement of the banking model. >> there is one distinction i want to point out. you just mentioned commercial 13%.ng is up almost consumer lending is only up 3.5%. leading to?hat auto debt and student debt. our third front-page story, a sad one. the death of comedian and actor robin williams. ownas found dead in his near san francisco. he was 63 years old. his publicist said he had been battling severe depression. he started as a stand up comic and did a 70's sitcom "mork and mindy." he won a best supporting oscar for "good will hunting." he battled cocaine and alcohol addiction. last month, he did enter a rehab

facility. a huge loss for the acting world. >> i think what he valued across culture was when he broke 60 million people, 50 million people would watch "morka n and mindy." every week. the nation stopped to watch this wonder child. >> and the voices. >> the voices. >> jonathan winters. i can't convey the shock about -- what i remember most about what he broken the comedy clubs was that he would give you the funny line and another funny line and then he would stop and he purposefully set you up by almost screwing it up. he purposefully would set you up and fail to nail you with the third joke. >> when you didn't expect it. in other words, the timing. >> it was off of johnny carson

and don rickles and joan rivers and all that. off of jonathan winters. we have a photograph later on. mourning. let's move back to her geopolitics of the moment. we have to go to washington. , dare not speak his name, president obama signals that the u.s. is one and done for maliki. phil mattingly is in washington. is there any linkage here between congress and our executive branch? preferress would really not to be dealing with this in the month of august when they're going to town halls and having to answer questions. what lawmakers are dealing with right now, the vast majority want to focus on domestic issues in november. you have the top-level foreign policy lawmakers that are

pushing for the obama administration to do more, pushing for a more comprehensive strategy, but you know better than anybody that the vast majority of lawmakers, particularly backbenchers, foreign policy is not their issue and they would rather not be talking about a. to us whatd secretary kerry and secretary hagel are actually doing on this tuesday morning. >> what you are going to see out of the state department -- -- johnohn posta pities kerry's deputies, you are seeing a heavy push on the influence of the formation of this coalition. has 30 daysvernment to form a coalition that can actually govern. during that time, there is some expectation within the u.s. government right now that n and his allies will work to undercut that ross us. that would be devastating to the united states.

-- process. devastating to the united states. from the defense department side, the u.s. is trying to use the military as leverage. use with they are doing up north to push the iraqi military leaders to say, if you think you , we are thel-maliki only people helping you and you have to come along with us. >> headlines out of iraq. the parliament majority of choice should take charge. that goes to the parliamentary debate underneath the prime minister debate to read >> president obama clearly already saying that he supports to move forward for the new candidate. curious, what is the support level amongst lawmakers in washington for continued navy strikes against the islamic state on the mountainside? >> it breaks on party lines.

you did not hear any lawmakers against what they are doing right now. targeted strikes, particularly to her checked -- protect avoid a personnel and genocide. i think there is concern on the democratic side that this could be a big case of mission creep, the could be an expansion of air strikes, and there has been a lot of concern on the republican strikes that more needs to be done. you are the spokesperson for the pentagon that this is not going to do anything to blunt the offensive in the long-term. that is everything republicans are seizing on, saying you need a broader more comprehensive strategy to move forward on this. concern and the criticism that the obama administration is getting from the hock side of things is that that does not exist. things is that that does not exist. areohn mccain and others

wanting it to extend into s yria. what are you hearing about mission creep? the islamic state is in control of the dam. protecting key infrastructure? >> yes, there is. you have to separated a little bit. without any doubt at all, airstrikes in syria are not on the table right now. you can say that definitively. as of now, we are told over and over again that syria is a totally different ballgame, a totally different dynamic. you have to look at the geopolitical issues in that country right now. aboutou are talking infrastructure, u.s. officials that i spoke with this weekend made it clear that they're concerned about what is going on at the dam. they're concerned about the islamic state possibility to use infrastructure as a weapon. those are on the table. if u.s. officials feel like there was a chance to take a shot that would actually have a lot of impact, they will

absolutely take it. >> thank you so much. phil mattingly from the washington news bureau. we have a lot for you on "bloomberg surveillance." back, ane come activist hedge fund taking on rupert murdoch. what do they want? we will discuss right here on "bloomberg surveillance." we are on bloomberg television. streaming on your tablet, your phone, and bloomberg.com. a very good morning to you from new york. ♪

>> michael mckee, contain yourself.

peyton will make an appearance today on bloomberg television. michael mckee did not sleep last night. peyton with the denver broncos. peyton. >> what does he say, omaha? [laughter] >> peyton. gear.l gets back in today, 3:00 p.m., "street smart." i'm tom keene. adam johnson and olivia sterns with me. scarlet fu is off today. >> we are talking about activist hedge fund that has a new target in their sites, it is tony for century fox. -- 21st century fox. in firm has acquired a stake the empire. what is the firm want from fox?

we will put that question to our guest for the hour. this is an interesting one. changet who has driven at sara lee and microsoft, they have bought this stake in 21st century fox after the news that they made the bid for time warner that failed. >> no wonder they came in and bought. is saying thatch 21st century fox is strategically complete without time warner. then why did he offer nearly $80 million to buy it? let's get your thoughts. is fox strategically complete? >> they are sufficient. they are still one of the largest companies on the planet in the media space. are there synergies to be realized by buying time warner? absolutely. at the end of the day, it is still a bit of a mystery as to what murdoch is trying to do in

terms of trying to add time warner. it is not exactly necessary. is it just about building more empire? in theis the jewel crown. it's it really worth a billion dollars? >> not by itself. -- $80 billion? >> not by itself. i think time warner would have been about something more than that. >> there is a book that i did not remember the author of who did a beautiful take. -- take on defeating cnn. is that urgency there today? >> fox is one of the most entrepreneurial media scales. >> generating cash flows. >> the start up businesses they have created are phenomenal. they have had some failures, myspace. >> yes.

>> but look what they did. there was a lot of good stuff. >> work in progress. >> give them a few years. >> fox is stepping away from time warner after time warner would not pick up the phone. is that about right? >> their argument was that they wanted other suitors to be in a market and in a position to make the bid. are you promising them? >> i wouldn't say that. [laughter] >> coming up right here on "bloomberg surveillance," the chief u.s. equity strategist at citigroup will be joining us as guest host. we have quite a one-two punch today. that is coming up. this is "bloomberg surveillance." we are streaming on your tablet coming or phone, and bloomberg.com. good morning. ♪

>> good morning, everyone. "bloomberg surveillance." i'm tom keene. adam johnson and olivia sterns. robin williams dying and 63. reported suicide. the paragraphs in the newspaper are all saying the first four paragraphs. here is what i will remember. passing.on the literally, robin williams to us -- describing his great mentor and perhaps describing himself. last night, one person put out an amazing photograph.

griffin put out a very quiet photograph on instagram. this speaks to american, and a -- two american comedy. american comedy. and 80 years of comedy. >> thank you for pointing out the common annuity -- continuity. >> i grew up listening to jonathan winters. my father would play them with bill cosby in the living room. my father laughed differently over mr. winters totally twisted comedy that came out of a really tough world. there is the "mrs. doubtfire." there is also the drama. dead poets society."

there are also the voices. >> the riffing and "aladdin." you are so right. there was just the voice. not the photo image. age 63.lliams we can't forget "good morning, vietnam." adam has the skill to do a robin williams that i could not possibly. [laughter] robin williams, age 63. ♪

>>

morning, everyone. "bloomberg surveillance." good morning from new york city. i'm tom keene. with may, adam johnson and olivia sterns. let me do a quick data check. it is a quiet day on the data check. how little is moving after some of the tunnel from -- t umult from last week. nymex crude is not moving off of the geopolitics. >> tom keene. 0.2%vertising grew just last month. got another $50 million to create buzz feed motion pictures.

what is going on here? his oldion is when media going to figure it out and actually go digital? >> there is a lot of digital going on. an important point and may be a quibble on the numbers, i would suggest that the second quarter national tv advertising grew prior2% versus 3% the quarter. if you compare that to all advertising, all advertising grew about 1%. these are not particularly robust numbers. >> not for anybody. >> tv is still growing faster than the rest of media. digital media is taking share from other digital media and from print. the bottom? racing >> for a lot of them, yes. it is a choice between bad and worse. you can sell inventory cheap or cheaper. -- buzz feedd worth $850 million? >> [laughter]

that's a good point. hard to say that the company itself is worth 800 $50 million after seeing their financials. it is a remarkable amount of money. >> triple digits in revenue. $100 million in revenue. atsales are growing double-digit rates. >> can i step in because i am so hip? omg.wtf, >> you've got them all right. [laughter] scroll down. cacap video the solution -- t video the solution to funding? is this the solution to fund editorial content? scroll down. meow."ypse item,s a classic buzzfeed

13 movies that would be better if they start cats. -- starred cats. the telegraph in london is not doing this. >> everybody has a different model. >> there is a lot of opportunity for journalism to be funded by very viral-based media. "huffington post" did this a lot to rid this is a minority of journalism out there. >> is it the future? >> you mean that are doing this? comes up with story algorithms. >> it is not a large share of journalism or media consumption. of moviesename a lot with cat titles.

as it generate enough eyeballs? >> the business is doing very well on the cat videos. what is the point? >> you create a perception of disruption. so that some will buy the company for more than it is worth. >> you have been a genius on facebook. >> thank you. >> in this terrific correction, 73ebook has moved from 75 to and change. resiliency personified. who was buying facebook shares? everybody owns it. >> there is still more room to get into it. buzzfeed learn from facebook? >> get bigger. much bigger. they use facebook as a tactic well. at yo.k they go after you, yo.

facebook is 200 times bigger. is not a material consideration in the grand scheme of things. >> ought they to be overly reliant on social media? nerable to beul overly reliant on social media? >> that is a risk, yes. >> where is this in five years? i still love getting my morning papers. >> the post will be there, so long as rupert murdoch wants to to be. journal haseet legs. the rest of the newspaper population. you might become a weekly newspaper. -- >> there isor

room for one best in class. the best in class on cat videos? [laughter] i'm fascinated by this question. advertising in all this new media. if you have a 24-year-old kid who wants to get into advertising because they watched "mad men." doch part of that mad world they fit into? -- >>marketing technology marketing technology, adobe oracle.rce, the agencies, frankly. >> they still have a place? >> they survive the apocalypse. ,> the market technology guys the reason to focus on them, it is a multi-trillion dollar opportunity.

oracle has been very aggressive in investing. salesforce.com is the same thing. >> cat videos have cross-border appeal. no matter where you live, everyone loves a good cat video. [laughter] they are fun. we will stay with the single best chart and stay with new media. live tv ratings. this is "bloomberg surveillance." ♪

>> good morning, everyone. "bloomberg surveillance." are you spending more on your vacation this year? let's think about that. that is her twitter question of the day. this is "bloomberg surveillance." we welcome all of you. i love this yellow today. the tv likes to do something different. >> since you were never going to take a vacation, i thought i would bring the summer. [laughter] mr. johnson will have our top headlines this morning. >> i used your vacation days. [laughter] thank you.

media, the government says that the country is rushing aid to the ukrainian city. 280 track -- trucks are headed to donetsk. the u.s. is warning russia to not send military help disguise disbelief efforts. -- as relief efforts. the cease-fire is in its second day. egypt is mediating talks between israel and hamas. trying toriot gear disperse demonstrators outside st. louis, missouri. the crowd was protesting a fatal shooting of an on armed teenager -- an unarmed teenager by a police officer. >> time for our single best chart. twitter question of the day should have been, how many of you are tivoing

surveillance? today's single best chart is focusing on the demise of live tv ratings. this chart shows why networks like fx are abandoning live tv ratings. on cannot just measure it what is happening in the single 24 hours after the broadcast. it is like giving the score of a big game in the third inning. days following the live broadcast of a program on sportsdrama, this is not , 50% more viewers,. there goes the live business. eric, and lightness. >> this started last month. fx said they would not do press releases any more to talk about live ratings. they admitted publicly that these ratings are so irrelevant. the fx big drama this and you look at them on the chart,

they're one of the leaders when it comes to recorded viewing pick up. it makes sense that they would be one of the first to say, we are done with that, we are going to start three days out. these include the first seven days out. most of the seven-day viewership happens in the first three days. a lot of these channels want to get the seven-day extra pickup. they want more money. they want all the ratings to count. >> do they get more money with .he follow-on ratings >> the first three days count and then after that it does not. >> i noticed this. cbs sticks out like a sore thumb for what they are not doing versus the success of nbc and abc. >> you could say that this is the inverse. the lower you are on that scale, the better your live ratings. >> you have more power to build the advertisers.

what does this do to the earnings power of the network? in criminal growth potentially. it matters. the reason why there is such a in the rating metrics versus same day plus seven or send a plus three, those people did not get most of the ads. >> that is true. we assume that people skip. 50% at the most skip. they forget that put on a recorded show. >> go back to the chart. you are saying it is better to be lousy at this chart? >> it is dependent on your goal. >> cbs was so adamant about pickup.the c7 >> some of the networks are also

making money, selling programs through hulu. that is another revenue stream. >> that is a very small chair -- channel. >> is the bowtie channel on their? >> the bowtie channel did not make it. [laughter] >> is nielsen out of business? >> they need to negotiate what the currency is going to be. can you swap out commercials? >> it means nothing for nielsen and everything for the revenue broadcast networks. how much are advertisers willing to spend? does kellogg's want to pay for that commercial or not? >> what does ford or general motors or mercedes-benz want to do? do they want me to watch it on my couch like we watched "mork a nd mindy"? >> what happens between three and seven days? if a retailer is trying to

get a person into the store on saturday and sunday, what good is the viewing on tuesday? been fun tolways funs. >> robin williams did 60 million indy."s on "mork and m >> it is because there are so many channels, the opportunities to even get 20 million on the broadcast network is such a rare commodity now that people are higher on a cpm basis. >> coming up, tom can barely sit still. we will talk to the mayor of boston on income equality and how cities can boost the minimum wage. "bloomberg surveillance." streaming on your tablet, your phone, and bloomberg.com. it is tuesday morning. we're just getting going. stay tuned to "bloomberg surveillance." ♪

>> good tuesday morning. "bloomberg surveillance." i'm tom keene. adam johnson and olivia sterns. let's get right to company news. >> sprint's new ceo is expecting employees to -- telling

employees to expect more cost cuts. his predecessor, sprint lost monthly customers every year since 2007. on the subject of finding more customers, electronic arts is its ending -- extending its subscription purchase to other countries. the access services now available in north america, australia, new zealand, and europe. good news for adam johnson. $134 million back in may for gnip. that is the latest company news. >> very good. ofty walsh is the mayor boston. that would be the last place boston red sox. the u.s. conference of mayors. focused on income inequality. it has widened. the average wage of the average new job.

grocery store example, stocking shelves, the quality job. thrilled to have you with us. an intractable global and american problem. what is the mayor's prescription? >> kevin johnson, the mayor from sacramento and the president of the united states conference of mayors, put together and inequality task force, where he had mayor de blasio chairing it, i am vice chairing it. we spoke about a roadmap about how to get equality when it comes to income. hashe last 40 years, there been a huge gap growing. what i am seeing in boston is that there is a gap between the middle class and the poor. .e came up with a roadmap we come up with some ideas yesterday on how to try to battle the speculative but. daye was a report the other -- battle this back in little bit.

there was a report the other day. look to walsh, when you the south side of your boston harbor, you see the success of higher education investment in jobs. your wonderful tech district. how do you find investment for lower wage, blue-collar jobs? >> we are talking to some of the tech or jobs because the run manufacturing jobs that go along with that were people did not necessarily need higher education. we are trying to work with them to complement businesses to come to other parts of our city. it comes down to job training and preparing people for the workforce. doing, one isre that we are looking on expanding early childhood education. that was a main topic yesterday for the workforce of the future. that is not going to be immediate, but that will help us in the future. right now, we are going to be struggling to come up with something concrete to fix the middle class. >> mayor walsh, you did come up with something concrete. you raised lot -- minimum wage

to $11 in boston. >> that was done through the legislative process. at the statehouse. somewere looking at economic indicators. the minimum wage helps to some degree. but you really can't, with a high cost of housing here in boston and in this country come you really can't ways -- raise a family on minimum wage. we are really looking above minimum wage. minimum wage is going to help people, but it is very difficult in most cities, urban cities, to raise a family on minimum wage. with boston strong one year ago and the success of the red sox, that was the focus in new england. is market basket. this has taken the nation by storm. i would like you to weigh in on this. and it would is hugely contentious. is that the kind of voice that labor is looking for? this uproar of the workers walking out at the market basket grocery stores?

>> what is happening with market basket is something that happened in labor in the early 1920's, 30's, and 40's. united, the employees went out for change and what is interesting is that with market basket employees, they are not unionized, they are not organized, and they really brought the company to its knees to a point where at some point market basket is going to have to react pretty soon. they cannot continue to go on the way they are going. no one is in the shops. the ownership is going to have to straighten out what they want done. >> this is in your very fabric. you came from a part of boston with the union was not even a four letter word you read -- word. what is your advice to those employees? >> you've got to stand strong. don't buckle. whenever they find a weakness, they will take advantage. this is not about wages or working, this is about ownership of the company, which is interesting. employees --his

these employees buckling. they are strong, they are united. we don't have an market basket in boston, but right outside of boston, we have market basket's. it is amazing to see them standing up together in unity. i think the labor movement could learn lessons from this. >> market basket represents the lower end of jobs, as does the minimum wage. as you just pointed out. what can mayors like you do for that more lower middle class? someone who is not juggling at the poverty level and still needs to do better. -- >> one of the things we are looking to do -- we really have to come up with housing. housing is the big cost here in boston and around the country, particularly middle-class housing. you have workers working minimum wage and they are paying 80% of their wages toward their housing. nothing less. they cannot afford a home, they need a roof over their family's

had. we are going to look at housing reform. not reform, but housing opportunities to increase supply. we spoke yesterday but -- yesterday about increasing minimum wage, working with businesses, and i think that is key. in the past, there has been a lot of back-and-forth limning businesses, wanting to raise taxes on the top 1%. , or thee like this income gap has grown so great, we need to have more of a conversation with the business community rather than say, you are going to pay more taxes. that is not the answer. the answer is to sit at the table and have a conversation about creating more jobs. >> do you support uber? is that good technology and innovation for a city like boston? popular modevery of transportation. we are looking at reforming our transportation system because we taxicabs, and others. uber is efficient and people

liked it. so i supported. >> thank you so much. marty walsh from boston. our forex report is here. stay with us. next on "bloomberg surveillance." ♪ . .

>> this is "bloomberg surveillance." it is a political showdown in

baghdad. the president commits to a new shiite leader for iraq. count them -- 280 trucks move from russia to eastern ukraine. they provide food and medicine. are they a trojan horse? stocksmer discontent -- remained ever resilient. good morning, everyone. this is "bloomberg surveillance." we're live from our world headquarters in new york. it is tuesday, august 12. i am tom keene. joining me adam johnson and olivia sterns is in for scarlet fu. our guest host for the hour to help you with your 201 k, tobias with citigroup. >> german confidence falls, u.k. food prices fall as markets compete for consumers. less thancturing fell excited. economic data here in the u.s. at 7:30, we have got the smaller

this is optimism. 10:00, we have the jolts jobs opening, which by the way may show that we have the most number of job postings since late 2007. finally at 2:00 p.m. we have got the monthly budget statement. there are some earnings out today. we're at the tail end of earning season. kate spade out before the bell. >> apple suppliers are now mass-producing new ipads. people close to the company say the latest model might be unveiled before the end of this order. most of them will have 9.7 inch screens. apple wants to reverse two quarters of slowing capital sales -- slowing ipad sales. people with knowledge of the totalsargo offering seo 1.3 billion dollars. it includes unpaid principal balance is worth nearly 700 lane dollars each. a new bidder could change chiquita banana's merger change. they're looking at a takeover offer worth more than $600

million. it is from a brazilian juice maker. chiquita has a deal that would be another tax and version that is your company news. >> is this banana yellow? for those of you on bloomberg radio worldwide, olivia sterns has a chiquita look this morning. you look lovely. let's get to the geopolitics of washington. the president dares not speak of name is president obama signaled the united states that they are done with the prime minister of iraq. -maliki will move on. phil mattingly is with us. what we hear from congress? >> it is tough. they are all at home. the biggest thing we hear is look, while there is a lot, there is a lot of splits between parties on foreign policy, on how to handle iraq and syria, there is a unification behind the

president's push for a new leader of iraq. maliki has no friends left in the u.s. government. it administration has been clear four weeks. they will be behind hide our alibadhi.y -- kerry'sis president agenda, who are the key players to get to supporting the iraq he ?ilitary >> officials have noted that nuri ale supportive of maliki stepping down.

traditionallynot allied with, secretary kerry has to do. maliki has no support. what he has to do is he has very tight ties to security forces, yes tight ties in to the courts come into the legal system, and i think there is some concern that while he has lost all of the vast majority of his support, he still controls levers that make the next 30 days very dangerous. senator john mccain has been carrying the banner for republicans given the big thetion marks about 2016, one people seem to be turning to. he has been curiously quite as well over the last week. who else should be the watching? >> it is always interesting -- john mccain and lindsey graham are usually very in-line on the hawkish side of republican foreign-policy. on the democratic side, eliot engel, the top democrat in the house foreign affairs committee,

also hawkish, also has criticized the president. he is one to keep an eye on. side, aer on the senate republican, had a blistering op-ed shredding the administration a few weeks ago. it is always interesting to watch them, but adam, you really do have to pay attention and notice the last couple of days to the president's left flank, dick durbin, one of the talk breaking senate democrats -- top ranking senate democrats have said if this goes beyond humanitarian purposes, he says start to turn on the president. keep a very close eye on that big of the wing of the party that has a big impact on white house politics. >> phil, thank you so much. phil mattingly from our washington news bureau. -- our guestada host is tobias levkovich. on the montreal canadiens, a

gazillion, million dollars for their star player. >> it is an impressive contract. >> we have a contract with the stock market. it just won't go down. >> it will go down a little bit. there is just too much figuring out how to get on the market, but they missed to a great degree. investors who have been waiting for these opportunities to buy have not gotten many of them in the last five years. every time we pull back 3% or 4%, there is new money. >> let's bring it up, courtney, if you would, just part of his thoughts here in august. earnings are essential to the market pattern giving dpe ratios are unlikely to expand. dips mentalityhe still seems appropriate. where do you buy the dip? -4%? >> nobody can predict it. when you have these particularly sharp dips in about a week and half, you see the money coming in.

the most important question -- you have the jobs listing numbers coming in. when will the blind needle start to move the other way? if that happens, you probably have to realign some portfolios. >> yesterday, ira jersey, three point 5% -- >> he is still standing by that? we said he was wrong, and he still -- >> another saying he does not know what it will take for bond yields to rise. at this point, where are you? next yearer is when rates start to move higher. some pressure is starting to build. >> what does that mean for you? >> it means that yields will move up but at a modest way. we're looking at three point 5% next year. if you look at the forward swap contracts, where is the 10 year bond yield implied next year, the market is not anticipating a huge movement. >> i hear you say there is no reason to be scared, which is what you are saying. have an economy that seems

to be finally getting settled. >> if you make this rally, should you now buy in? >> we think you should be buying inconsistently. you do not throw all of your money in any time. we're looking at another 7%, 8% next year. >> we will have an important conversation this half-hour about this high-yield flow. i want to get out in front of that conversation. the high-yield panic or angst, is a good for your world? >> it is not good for small caps. there is at least a relationship between small-cap performance and high yield. i think so much money is in the bond market, and so much money salty spreads tighten and tighten, and it will continue to tighten. the first sign of trouble, people are saying let's lock in my profits. >> which do you like best? >> i still like tech. i have liked it all along. gowaiting for your tech to on. >> the boring tech? >> i think you have to be

careful getting what we call old tech, new tech. if you are selling software into a mobile application today, it used to go to a traditional pc. is that new tech or old tech? it is hybrid. you have to be careful. i do not like buying the stratospheric pe register. >> facebook, twitter tech -- >> i am not a big social media fan. you will not find me there. >> the jolts numbers come out today. but there isring, still no wage growth. >> there is a great chart that one of my colleagues, maxine -- you take a look at his stuff, tom, and he shows the unemployment rate and the employment compensation index highly linked. if you look at the hiring intention survey, it is a wonderful 12-year lead indicator on employment. >> love that. we have got a twitter question. >> yeah, we do. it is relevant given what tobias

was just saying, in theory, incomes have gone up. are you spending more on your vacation this year? tweet us. it is a backdoor way of trying to figure out how we are all doing out there. are you spending more money on a vacation this year than last year? >> we look at stocks bonds, currencies, commodities. futures are up 4. 236. now, 10-year yield, edit higher yields from where tobias levkovich says they will be in a year. >> coming up, tha staying with high-yield bonds, what could the radio market? ♪

good morning, everyone. tom keene. adam johnson and olivia sterns are with me. scarlet fu keeps going back and forth, should i return, should i not return, using vacation days. >> a little disconnect happening in banking center. increased business lending has increased profits to the highest in 23 years, over 40 big only -- over $40 billion. number is actually down

about .5%. sharing akovich is little wisdom. why is that you think investors are reluctant to pay a four bank profits when the profits are the best in 23 years? >> we have to be careful when we say banks. there are the big monday center banks and then the -- money center banks and then the regional banks. banks have been affected by what is going on in the market, so there are still pressures on roth is for those guys, particularly the regulatory framework. regional banks not quite having the same type of pressures, although there are some postacute not have the volker to worryost banks about. what is the path to good prophets generally? what is also interesting about lendinginess data, it tends to lag credit conditions by about six quarters, so if you are waiting for the business lending data to tell you something, you are way behind. >> although that is up 12 point 6% and consumer lending is only up three points 4%. 12.6% and is up

consumer lending is only up 3. $ %. >> if you look last your diversified financials, they did very well as a group. >> got it. so the other issue as i look at the data, and you keep me honest here, returned on equity under 10%. should we be concerned, and might that be one reason why people are not buying? >> it is certainly one of the reasons, but if you have more high equity requirements, your ability to get that are always aware was in the past in the teens will be harder because you cannot lose leverage the same way. there is an interesting academic argument here whereas we pay more because there is less risk, or do we pay more because there is a higher return on equity? if you are to argue it is a safer investment, you should pay higher. >> this morning's ft, the thendary bond investor,

trick is to survive. you have to get to the crises and you have to get through them. >> there are times to prosper and there are times to survive. over the past five years, i think we have learned that a few times. ft thisthat in the morning. coming up, it is time for this matters now, where we discussed the growing pressure. use of cash is everything. use of cash, i say. ♪

>> it is our twitter question of the day -- are you spending more on your vacation this year? why are they giving me this twitter question? i have not taken a vacation. >> it is a back way of figuring out if people feel like they have more money -- >> or maybe somebody is trying to tell you to take a vacation. >> that is out @bsurveillance. citymorning from new york and our world headquarters. i am tom keene. joining me adam johnson, and she

takes my vacation days, olivia sterns. our guest host today is tobias levkovich of citigroup. >> p5 for political control in iraq is reaching crisis stage. nuri al maliki will not step aside for his appointed successor. confusion, islamic militants are grabbing more territory. and police fired tear gas at demonstrators leila signed outside st. louis, missouri. the crowd was protesting the fatal shooting of it on arm african-american teenager by a police officer. the case is now a subject of a civil rights investigation by the fbi. and investigators are looking into the death of robin williams. the 63-year-old actor and comedian was pronounced dead yesterday in his home near san francisco. police say he suffered asphyxia and they believe it was a suicide. williams' publicist and say he had been battling severe depression.

>> many ways to take this. tobias levkovich of citigroup was just commenting on his ability to transform ball. he would get on stage and just tear apart golf. >> i think his definition of the invention of the game of golf is one of the funniest routines i have ever seen. >> yeah. inappropriatet words in there, but it is really, really funny. again, i think this investigation needs to go through. this is north of san francisco. >> yes. admittedly, if i read the headlines, i will be said -- as i've read the headline, i will be surprised, i will be honest, that the authorities so quickly said suicide. memories, but i'm really fascinated. >> the whole trio -- a comedic genius, he had the comedy, "mrs. doubtfire," all of the growing up "aladdin"

for me, he was the genie. ."he dead poets society and you do forget "the bird cage." >> the offspring e-mailed me last night. >> the offspring being one of your children. why do you call them that, by the way ? >> he calls them a tax write off. >> no i don't. "bloomberg surveillance," the exit from high-yield bonds, it is no super us to bond pros. it has occurred in a relatively orderly fashion. opportunity strikes. james teagan is with blackrock as we speak this morning about high-yield bonds. if you look through what has happened in july, you have seen increased geopolitical risk in both russia and gaza. you have seen uncertainty around what the fed is going to do, and then you have got event like argentina, so the markets have

taken a pause. he high-yield markets -- >> where does the money go? does it go to fixed income? doesn't make tobias levkovich happy? >> tobias is more on the equity side. suggest the new risk that is out there in the uncertainty come and they will probably reassess. i think you have seen more people move to cash in others and to fixed income assets. really is a risk off trade. >> all of that said, it has come back to life a little bit. the high-yield debt market. given all the geopolitical risk, russian troops on the border, iraq entails, what would it take to actually cause a major selloff in high-yield? >> any one of those events, you talk about the geopolitical, as to why the markets are uncertain around that, is because generally the husband opec risk. you're not sure which way does going to go. and the ability for that -- >> did he say convexity?

>> he did. >> we are trying to be calculus-three in august. >> the ability to it escalated to something that would really impact the economy is high. is the correlation right now between your world and the full faith and credit 10-year yield? theyle related? -- are correlated? >> off and on. is au look at that, there negative correlation, and that is different from what you've seen in the last couple of years where you have had both the yield market or the treasury market rally when you see equities rise. isay what you are seeing more of a historical negative correlation when there is a risk off trade, you see people buy treasuries and sell equities. >> is the pressure coming from the bond flows themselves like high-yield outflows or is it a function more of the leverage that was sitting in spread trades and things like that coming off? and 2007d say in 2006

it was a very different market. there you had the leverage at the corporate level and then you had a significant amount of leverage at the investor level and the fund structures. today i did not think you even see that. you see such a move over the last several years, the leverage moving out of the corporate sector, the household sector onto the central bank as well as sheet.cal balance corporate is in really good shape. leverage is low, rates are high, and define the structure does not allow the leverage right now from the investor base in the fund. >> jim, very quickly, if i were to make the most money in the next month, do i buy your junk bonds or tobias' cheap tech stocks? >> good question. >> if you look over the next six months, we still think that the high-yield market will do well, but we think the equity markets will continue to improve and you will see stabilization. >> jim, thank you very much, jim keenan from blackrock.

trucks are heading to donetsk. is it a trojan horse? this is "bloomberg surveillance" on radio and streaming on your tablet. ♪

♪

>> this is "bloomberg surveillance." keenedam johnson with tom and olivia sterns. scarlet fu is awful. lucky her. meanwhile, olivia has company news. murdoch -- aert $1 billion stake in 21st century fox. the price of stock fell when murdoch made a huge bid for time warner. and royal bank of scotland made sell the international arm of its private bank. word leaked from a memo to employees that they are shifting its focus to wealthy u.k. clients. among them queen elizabeth ii and retired soccer star david beckham. and it is like the old playground do over. "the wall street journal" says

sales of vascular biogenic score shared for six days, but these sales were stopped because a key investor act out. that is your company news. >> thank you, olivia. thistime for a little matters now. >> thank you, adam. this matters not to our guest host, tobias levkovich of citigroup. a set of cash flows, tax do not shake., it is an immediate $12 billion improvement. one indication of the incredible treasure on corporate leaders to engineer cash back to shareholders. it is a whole new twist, tobias. share repurchase, m&a -- maybe we should invest, now we have financial engineering. >> well, financial engineers have been going on for almost as long as i have been in the business. i think you are seeing more interestingly is a bit of a shift away from the dividend and

the stock buyback program to more m&a and capital spending stop. they are using cash, but they are using it in ways to grow their businesses, more so than just shrinking and returning cash to shareholders. >> which sector is more interesting here? media, pharmaceutical, corporate version -- which sector has your an version for use of cash? wife one way we try to get a feel is to look at the difference between cash flow yield and junk bond yields. what are your most expensive financing if you are going to do transactions? probably the widest spread would be in the energy sector where you have big differences between the financing yield and the cash flow to yields that could support the financing. >> to use exxon mobil, i know you do not speak about individual securities, but it has a lot of wiggle room to rate dividends, shareholders, go out and buy something. >> again, i am looking more from the m&a perspective, so you would say that there is a lot of reasons to believe there could be additional mergers and the energy sector. i think the biggest companies do not get the biggest benefit or

biggest bank for the buck, it is more the midsize and smaller ones. >> within your decades of experience, i think of the basic idea of companies in the huge pressure they're under, is it the constructive pressure, or are you looking at shenanigans? >> i remember when i was an analyst, any time you heard a company say we are doing this for strategic reasons, you get nervous and say these guys are having a highly diluted a deal, but if you are doing kind of the right strategic area -- or let's say the energy idea, i have got nothing in the shale gas world, i need to have some exposure to it, that is probably not a terrible transaction. but i think there are lots and lots of talk in deals getting done. people want to move into a new market or new product line that fits in with their businesses. those make an enormous amount of sense. >> separate topic, important dow bouncesthe perfectly off its two-day moving balance.

>> technicals. investors looking at the technicals and say do we have oversold conditions, overbought conditions. >> and a step in right there and buy it? >> or they sell it. look, i want to lock in what i have made. . investors are tenuous about this market. they are resilient, but they're not really willing to step up when the market runs. >> because they are tenuous, does that mean you are not a bull? constructiveself -- >> i call myself constructive and still bullish. 8% is a nice return, but it is not like gangbusters. >> tobias levkovich, not gangbusters. olivia sterns. >> thank you so much, tom. u.s. stocks are rising after a mixed session in europe. european stocks little changed. investors focused on what is going on right now in ukraine. the 10-year yield unchanged,

2.43% . disappointing confidence survey coming out of germany. the nymex crude just trading above $97 a barrel. >> this is "bloomberg surveillance." on bloomberg television, streaming on your tablet, your smartphone, and bloomberg.com. if you are there, we are there. i am adam johnson with tom keene of course and olivia sterns. scarlet fu is off today. our guest host of the hour is tobias levkovich of citigroup. we will get to your headlines here at 7:30 new york time. an ebola drug will be given to a pair of light. berian doctors. the company that makes it says supply is running out. the virus has killed more than 1000 people so far in west africa. long-distance negotiations are preserving a fragile truce so

far in gaza. he cease-fire is now in its second day of the 72-hour cease-fire. that is giving aid groups time to bring in much-needed food and medicine. and egypt's military leadership may have committed crimes against humanity. human rights watch is releasing a report today on mass killings there last summer. it is calling for an internal investigation. hundreds died while protesting the ouster of the elected president by the military. those are the top headlines. isn't it amazing -- egypt, libya and the headline for very different reasons? on the one hand brokering a truce and on the other possible crimes against humanity. >> and of course under the new sisirnment, military, i'lal- took over. saying government media their country is coming to the rescue of ukraine. russian aid to besieged

ukrainian city. they say 280 trucks are heading for the net -- for donetsk. nato speculates russia may intervene. the u.s. is warning russia -- not send military help disguise as a relief effort. joining us now on the phone and river -- ian bremmer, president of eurasia group. is this a trojan horse? know the russians are great humanitarians, so nobody buys the cover story here, but they still do not want to invade, so what they are trying to do is push the international community off by effectively breaking what has been this ordon that the ukrainian military is at. they are buying time. they are trying to get these guys the material. there are a couple of options. first come if the ukrainians decide not to let them in and

then the russians ramp up pressure and can force it because they control a fair amount of the border, or secondarily, the ukrainians let the men in the russians keep doing it and maybe the first one is all humanitarian aid with a bunch of soldiers driving trucks. some of them don't come back and me,raining, but believe you if ukrainians let this end, this is not the only group of trucks that will be sent in by the russians as humanitarian aid, and what they want is a wedge in to keep these russian separatists going. the key part of the market, who seem to believe over the last two days that this was going away, the russians are not giving up on southeast ukraine. they will not capitulate. the ukrainian president has shown no interest in trying to pursue, and it is hard to do, or you might continue to have expanded violence. >> the markets do seem to be taking vladimir putin at his word that he will try to de-escalate the crisis in ukraine. is that a mistake?

>> taking putin at his word for propaganda value is generally not a wise thing for the markets to do in any circumstance. trucks really drive 280 through the difference of what putin has been saying since the beginning of this crisis and what has actually been happening on the ground. there are a lot of "humanitarian russian support" insight ukraine -- inside ukraine over the last few months which has led to all sorts of bloodshed. i'm not suggesting the russians are 100% response will for what is happening here, but you cannot read this human attorney and mission at its face value. i think that is widely understood. -- this humanitarian mission at its face value. i think that is widely understood. annie's to large cities are filled with separatist separatists right now on southeast ukraine. bremmer,hank you, ian head of eurasia group.

and how the economy has changed your spending habits in your saving habits. it is our twitter question of the day. please let us know -- are you spending more on your vacation this year? tweet us @bsurveillance. this is "bloomberg surveillance." on bloomberg television, streaming on your tablet, your smartphone, and bloomberg.com. ♪

>> good tuesday morning, everyone. "bloomberg surveillance."

i am tom keene. with me adam johnson. olivia sterns is here. scarlet fu rumored to return sometime in august. >> joining us right now, "in the loop" anchor betty liu. >> yesterday we had the first aid for the sprint ceo. brian cornell, the guy who ran frito-lay americas at pepsico will be starting his first date on the job, the we have got a big target focus roundtable canasta biases think of i am not going shopping, i'm not here to talk about the company itself. , who formerly worked at j.crew, he is joining gromek,ll as joe the current chairman of tumi. two big retailers. >> instead of a cheeky move for all of these executives to come in, what tom keene should be going on vacation, give us a sense -- what is on a new target

ceo's to do list? >> there will be a lot of things. number one obviously is getting over this whole hacking scandal from last year. the second is dealing with canada. canada has been a big problem for target, as you know. the third is looking at the inventory. now you can go to target and buy groceries, back to school supplies. the groceries have been a failing area for target. do they want to stay? market center is making their money on food, not clothes. betty, thank you so much. looking forward to that interview with the ceo of target. >> we have all been talking about robin williams, who certainly as you know by now died yesterday. tom pulled up a tweet from charlie rose is that i have been doing this a while. there is no one like robin williams. here is robin williams with charlie rose earlier. >> yes, it has always been a

wonderful kind of alternative to the acting because it did two things -- av bills and also great therapy. >> therapy? literally. whether it is things going on in my life, going on in the world cup it was always a great relief, especially in the early days with mork on, it was kind of the anti-mork. i did do something darker sly would always be going "hi, how are you?" it was something totally different, which was great. >> incredible to hear him. >> that was from 2009. i had not be -- i had not realized how much robin williams had started to sound like jonathan winters. i know he had cardio issues as well. how he started to sound like is winters.tor, jonathan >> he pointed out for us, robin williams talking about jonathan winters, and it sounded like someone else was talking about robin williams.

they were so close. >> i used to sit in play guitar and listen in on of them because as you know, adam, you have got the gift that i don't. jack parr and jonathan winters, who johnny carson and all that, was fabulous. here is agriffin, photo again from instagram, thank you, so much, kathy griffin, of showing this photo of robin williams, ms. griffin, and jonathan winters. ♪

>> good morning, everyone. "bloomberg surveillance." important interview tomorrow, 6:00 hour. gina martin adams has been an exceptionally cautious bull. so many doubt this equity market. she will join us in the 6:00 hour tomorrow. good morning, everyone. tuesday morning, "bloomberg surveillance." welcome all worldwide to our world headquarters in new york city. our guest host this hour, tobias levkovich of citigroup. olivia sterns has our company news this morning. >> sprint's new ceo was telling employees to expect more cost

cuts. he says the committee will complete aggressively for users. customerst monthly every year since 2007. speaking of finding more customers, electronic arts is extending its subscription services to more companies. ea makes the game medal of honor and other video games. the company is now available in new zealand and western europe. twitter paid $134 million for social data provider mip back in may. the acquisition gives twitter more control over information gathered from content on its network. that is the latest company news. >> there we go. it is time for our morning must-read. >> i have one that really jumped out from the "wall street journal." martin feldstein, the nobel winning economist, and robert rubin writing jointly " accommodation of extremely low

10-year yield, low volatility, and the reaching for yield elsewhere by investors and lenders suggested the risk of excesses and the instability have increased beyond the banking system." a shot fromthat is a warning for all of us. >> a combination of writers, which i think is very unique. >> that is unique. martin feldstein again, nobel laureate -- >> not a nobel laureate -- >> my bad. >> i made the same mistake. >> tobias levkovich, how concerned are you about what seems to be brewing about what might be a fed that has overstayed its welcome, providing access liquidity? >> i'm not even sure we can blame it on the fed. there is but a bunch of academic data throughout 2013, this glut of past globally, willing to buy government paper probably has more effect than just the fed. i think a lot of people put it on the fed. what is interesting to me about

has always bob rubin been a cautious fellow. feldstein has been talking about fiscal problems for a long time. i think he is right on the ball. the real issue here is they are almost moving away from the larry summers, new neutral environment where they say there will be some risk. i kind of think bob and marty are right on this. >> this is an important the fiction between professor summers and bill gross with his new neutral, and secretary rubin and professor feldstein saying we can get back to the american enthusiasm of the 3.5% gdp. the key sentence come in the short run, markets tend to be psychological. in the longer run, they reflect fundamental. that is your world, isn't it? >> i think fundamentals are more important, but ultimately, i get very nervous with new paradigms. if we were talking about the new economy back in 2000, home prices never go down, new

normal, now new neutral, i think there is some dynamism in the country -- >> well, is social media in a paradigm that worries you now? thisll, let me define it way. i think the mobility platforms are part of that great, innovative structure. there are always successes in growth. think about what we were so excited about the internet in the late 1990's. many of those things played out. just what we paid for them got kind of silly. >> you have done historic analysis of corporate products. let me at the basic question -- when does labor get its fair share? [laughter] i mean, robert rubin would go, well, in all likelihood, that is about all he would say -- >> i will show you a chart thomas the prophets, presented to gdp, and compensation percent of gdp. karl want to get very ora say how theycould

are getting screwed over by the capitalist pigs and viva loretto revolucion. profits are below what they were in 2009, or 2007, sorry, for eight of the 10. for profits and market expansion within the corporate -- >> i think we need a new title for tobias, olivia. they can be senior vice president oligarchs. >> ouch. >> i also noticed how you pull together. question, when do the workers start to see it/ >> i think they are already seeing it? >> where? >> truck drivers, welders, machine die operators, technology, we see it spreading into homebuilder workers. look, one of our biggest shortages is people who have degrees in computer and math in this country.

the guy who can dunk the ball and make $25 billion a year. i am short. i never had that -- >> what is the program being made in san francisco? >> with four or five years of a spirits, a good programmer can make $400,000 plus because otherwise you get pulled away by some start up with the hopes of getting multimillions. >> entrance level 160 coming out of college -- >> i think that is more than goldman sachs -- python.rget this is not these guys are really skilled. everybody goes -- i will go to code camp and get a job. these guys have a real talent. david kirkpatrick really shows that. >> if you look at the people with -- unemployment rates of people with less than 27 weeks of unemployment, they are down to almost the lows that we thought the highs of the economy before. the skilled workers, the lace ism structure in a serious problem, but if you have skills, you should be able to get higher.

for ournow, tobias, stories shipping today. tom, you have the run of radio. >> the front page of every article, including bloomberg news. you look at the bloomberg headlines, there is no news. >> although i find it incredible that president rouhani of iran is now backing president obama saying he approves of the american candidate to replace maliki, al-abadi. >> we cannot forget the news flow on the mountainside of the southern border of syria. >> there have been three drops of humanitarian aid? do i have that right? >> beachwood are -- yes. the twitter feed is shocking. >> people being hunted down essentially by islamic state, they are now going back to syria for safety. >> syria is safer than iraq? >> it is really grim. the confluence of events and the

quiet of the last 12 hours leads us to another 48 hours. we are really going to see some -- we have to pay attention to it. >> we do. tom, you are headed over to radio where "bloomberg surveillance" continues. if you cannot live without tom, please turn on your radio. >> the jolts job opening survey. posted 4.63 5 million jobs in the u.s. since june highest of 2007. what do you make of that? the fact that we are posting jobs. >> again, we are back to this kind of mismatch between skills and needs. the labor force is not have necessarily be skills that the companies want, and this puts pressure on compensation for those to do it. i think we have to make one clear distinction. the top 20% of income earners in the united states account for 37% of consumer spending and about 50% of discretionary

consumer spending, so they punch way beyond their weight in terms of economic activity. 80% does not help the other of workers, but when you look at gdp numbers and corporate -- >> job opening questions over how much they actually pay. >> they may have to pay them some more to get people either to improve their skills -- look, i even hear about bids for wall street analysts today with higher prices. not quite mated to be strategist level, but we are even seeing it in our industry. >> if you have more money in your party, it begs the question ofour requested a day --are you spending more on your vacation this year? here are some of the answers -- i am spending less and taking fewer trips. i do not think i get my money's worth, especially with high hotel rates. that is interesting. another answer -- finding a decent holiday is a nightmare. do not get value for money. more restful at home. staycation warehouse.

another -- spending more money, but spending less time. >> that is that. hang in there. >> tobias levkovich of citigroup, thank you for joining us. >> thank you. >> tomkinson is unreal, betty liu takes over on tv. ♪

>> good morning. it is tuesday, august 12. we are live from bloomberg world headquarters. you are "in the loop." i am betty liu.

a great show as we discussed the brian cornelling on his first day on the job with a powerhouse roundtable. -- matthew rubel mek.also, joseph gro also, some great conversations -- could you be headed to walmart or your next actors appointment? model, whyks on its does mcdonald's need to franchise? why not take it all in house and keep the profits? the political crisis in iraq has gotten worse. the prime minister is refusing to give way to his successor, demanding that he be allowed to survey third term. apple's